Major Indexes Decline Amid Auto Tariffs and Economic Data Pressures

NEW YORK, March 27, 2025 (AP) — Major stock indexes fell for the second consecutive day Thursday, driven by a notable drop in auto sector stocks as investors reacted to new tariffs and fresh economic reports.

The Dow Jones Industrial Average closed 0.3% lower, while the S&P 500 and Nasdaq Composite slipped 0.4% and 0.5%, respectively. The dip occurred after a three-day rally that had previously lifted market optimism about a potential recovery from a prolonged downturn.

On Wednesday, President Donald Trump announced tariffs on foreign-made automobiles and parts, escalating ongoing trade tensions. The tariffs are part of an initiative to fortify U.S. manufacturing and create jobs, but economists warn they could disrupt the supply chain and drive up costs for consumers.

According to JPMorgan analysts, the tariffs could increase costs for the auto industry by approximately $82 billion annually, significantly impacting manufacturers and raising consumer prices by nearly 12% if the costs are passed on. The announcement came as a surprise to investors already wary of potential economic repercussions.

General Motors shares plummeted over 7%, leading declines in the S&P 500, followed by Ford’s drop of 4%. Notably, Honda and Toyota each fell nearly 3%. Parts suppliers BorgWarner and Aptiv both lost about 5%, with Lear Corporation shares plunging more than 8%.

Despite the challenges within the auto sector, electric vehicle maker Tesla saw a modest gain of 0.4%. Other megacap technology stocks had mixed results, with Nvidia and Broadcom declining by 2% and 4%, respectively, while Apple rose 1%.

Adding to the market’s unease, the final reading of the fourth-quarter gross domestic product came in as expected early Thursday, along with weekly jobless claims numbers. Investors are closely monitoring economic indicators as they seek reassurance about the stability of the U.S. economy. The Federal Reserve’s latest interest rate decision, set to be released on Friday, is a pivotal upcoming event.

In the tech sector, shares of AppLovin crashed 20% after Muddy Waters Research announced a short position against the company, alleging dubious practices in the advertising technology space. Despite this, AppLovin’s stock has nearly quadrupled over the past year, reflecting optimism regarding AI advertising tools amid its recent setbacks.

Petco shares surged by 33% as the retailer revised its fiscal 2025 earnings forecast upward, aided by a new partnership with Uber Eats for pet supplies. CEO Joel Anderson emphasized efforts to streamline costs and improve product offerings to cater to discerning customers.

Meanwhile, GameStop shares tumbled 23% following the company’s plan to issue $1.3 billion in convertible bonds to finance corporate activities, including Bitcoin purchases. Analysts remarked that this strategy mirrors that of other firms that have invested heavily in cryptocurrency.

Dollar Tree shares climbed 11% after analysts issued optimistic projections regarding the company’s future following its $1 billion sale of Family Dollar. The transaction is expected to enhance Dollar Tree’s profitability despite upcoming tariff headwinds.

Gold prices also reached record highs, with futures climbing to $3,070 an ounce amid rising investor concerns over economic stability and trade wars. Goldman Sachs has raised its price target for gold to $3,300 per ounce by year-end, highlighting the metal’s appeal as a safe haven.

As market fluctuations continue, analysts advise monitoring key support and resistance levels in tech stocks, particularly for chipmaker Nvidia, which has seen significant volatility recently.